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Comment by codeulike | Hacker News Reader

Yeah, my understanding is that miners are not just mining, they're also powering the distributed transaction engine of bitcoin. Is that correct? In which case the power consumption needs to be compared to (per $ or whatever) consumption for Bacs, swift, visa etc

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They are doing a make-work exercise which only needs to be time consuming, in order to prevent cheaters. It's mostly throw-away work. The actual computation that needs to happen is pretty trivial. I think it would be possible to fix Bitcoin so that "proof of work" is something that doesn't consume all that electricity, but I'm not sure what it would be.

If it doesn't consume electricity at a high rate, it's not proof of work, ie there's nothing to "fix".

Since it's memory-intensive, scrypt might be a more energy-efficient form of proof of work than SHA.

Already being used: http://litecoin.org/

Only more efficient in that nobody's throwing lots of chunky GPUs at it.

Does a GPU use less power while mining Litecoin? It seems like the cores would be 99% idle.

Nope. The GPUs get plenty hot. The difference is that with Litecoin, your CPU gets hot too! I have not dug into the technical details, but at a glance it looks as if Litecoin motivated research that fairly successfully overcame the GPU-unfriendliness of Scrypt. If anyone here can confirm or deny this, I'd love to hear it.

The CPU doesn't get that hot. On a machine with an Athlon II 240e cgminer uses ~18% CPU vs the GPU that sits at 99% load. scrypt is indeed viable on GPUs, but it depends onto the available memory bandwidth which presumably lessens the impact of FPGA/ASIC if people start to push those as LTC mining solutions.

which is what Litecoin tries to do, I think, but for different reasons. https://en.bitcoin.it/wiki/Litecoin

If somebody could explain what the new thing Ripple means by resolving things by consensus instead of proof-of-work, maybe that would work.

But as far as bitcon presents it, proof of work is needed to resolve the problem of keeping a honest transaction log in an untrusted environment.

As I understand it, Ripple's trust system works by selecting multiple third-parties that are unlikely to collude against you, and checking that they agree on a transaction before considering it "confirmed".

https://ripple.com/wiki/Consensus

I understand that its a make-work exercise, I was querying whether the output is just mined coins, or whether the output also includes verifying everyone elses transactions. My current understanding is that its the latter.

Sure, so I'm not sure which "output" you mean. The output of the computationally-intensive part is really just a magic number that solves a puzzle. Once a miner finds that magic number, they publish a block that has the most recent transactions (which are all verified separately), as well as the special transaction where the miner grants themselves the current mining reward. Other miners see it and verify that all that stuff was correctly computed.

So that whole block (which is maybe what you're calling the "output"), does contain the puzzle solution as well as all the latest transactions. But the actual specifics of the puzzle (which is currently brute-force SHA1 reversing), aren't super important. It could always be swapped out for some other task.

By 'output' I (think) I meant the output we get for the energy used by the miners.

You seem to be saying that The Miners have to verify transactions to claim their reward? When you say "which are all verified separately" - you mean verified by the same miner who publishes the block? If so then the bitcoin network as a whole benefits from their energy use.

On the other hand, I see your point that the make-work is not intrinsically linked to transaction verification. But my understanding is, its the difficulty of the make-work that protects the block-chain from being hijacked by ..er... 'the bad guys', whomever they may be.

So, the whole thing kinda makes sense, and the 'make-work' is like an energy commitment that keeps the whole thing integrated. The assumption being, the total commitment of all bitcoin users will always be greater than the commitment of any single attacker/attacker group.

Correct. It's quite ingenious actually.

"By convention, the first transaction in a block is a special transaction that starts a new coin owned by the creator of the block. This adds an incentive for nodes to support the network, and provides a way to initially distribute coins into circulation, since there is no central authority to issue them."

http://bitcoin.org/bitcoin.pdf

But how does that work when the generation of new coins tails off, but the generation of new blocks does not?

Good question. Longer transaction blocks maybe? Would love to hear this answered.

From whats said here https://news.ycombinator.com/item?id=5548503 miners grant themselves a fraction of a bitcoin for each block, and that fraction is what decreases over time.

Each block also awards the miner a variable fee for every transaction included in that block, so there will always be an incentive to mine: https://en.bitcoin.it/wiki/FAQ#If_no_more_coins_are_going_to...

The proper measure would be Joules/transaction.

Wouldn't - if bitcoins was to become mainstream - wouldn't there be a need for bitcoin debit or credit cards though and atms and banks. So realistically we are only limited to comparing it to actual transaction costs.

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